Tobii AB: Tobii Resolves on a Rights Issue of Approximately SEK 450
Million for Large-Scale Initiatives on Eye Tracking in Virtual Reality
and Smartphones

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Tobii AB (publ) (the “Company” or “Tobii”) intends to strengthen its
organization and make substantial investments in technology and market
development to capture the rapidly increasing interest for eye tracking
in virtual reality and smartphones. Tobii’s ambition is to take the same
world-leading position in eye tracking for consumer electronics that
Tobii Dynavox and Tobii Pro have within their respective segments. To
finance the new expanded business plan, the Board of Directors has
resolved on a rights issue of shares of approximately SEK 450 million,
subject to approval by a subsequent extraordinary general meeting.

“The interest for eye tracking in various consumer applications has
developed at a substantially more rapid pace than we anticipated at the
time of the IPO in April 2015. At that point, we believed it would take
longer time for eyetracking to become current for use in smartphones and
VR-headsets than what we see today. The capital raise of just above SEK
400 million that was conducted in connection to the listing is
sufficient to complete the business plan we decided on then, but to
create the conditions to take a leading position also within these new
segments, we now need to further increase our efforts in market and
technology development. We are convinced that the time is right to
expand our investments and that there is good potential to create great
value for our shareholders,” said Henrik Eskilsson, CEO of Tobii.

Summary

The rights issue is carried out with the intention of strengthening the
organization and investing in technology and market development in the
new volume markets for virtual reality (“VR”) and smartphones, and to
give Tobii increased financial flexibility to quickly carry out
acquisitions.

Tobii has earlier today announced its first design win with a large
smartphone manufacturer, which is deemed to be an important first step
towards a long-term goal of integrating eye tracking in smartphones on a
larger scale.

The complete terms of the rights issue, including the increase in share
capital, the number of shares issued and subscription price are expected
to be announced at the latest on November 24, 2016. Provided that the
rights issue is approved by the extraordinary general meeting, the
record date for the rights issue will be December 2, 2016 and the
subscription period will run from December 6, 2016 up to and including
December 20, 2016.

Shareholders corresponding to approximately 40 percent of the voting
rights, have expressed their support for the rights issue.

Today the Board of Directors announces a notice for an extraordinary
general meeting to be held on November 30, 2016.

Background

In connection with Tobii’s initial public offering on Nasdaq Stockholm
in April 2015, Tobii presented the two profitable business units Tobii
Dynavox and Tobii Pro and the business unit Tobii Tech, in which Tobii
invested heavily to establish eye tracking in the market for gaming
computers.

Since the listing, Tobii Dynavox and Tobii Pro have developed well, with
profitability and increased sales within the two business units and with
good potential for continued positive development.

The investments in gaming computers within Tobii Tech have also been
successful and in a short period of time the business unit has reached
several important milestones. Dell, Acer and MSI have all released
computers that integrates Tobii’s eye tracking sensors. In addition,
Acer has launched three monitors with built-in eye tracking. Some 40
games with support for Tobii’s eye tracking have been launched,
including several of the year’s largest game titles, such as Tom
Clancy’s The Division, Assassin’s Creed Syndicate, Deus Ex: Mankind
Divided and Watch Dogs 2. The business unit’s sales to external
customers are rapidly increasing, albeit from low levels. The market for
eye tracking in gaming computers is still at an early stage.

New planned initiatives financed by the rights issue

Recently the development and interest for eye tracking has accelerated
considerably, particularly within the virtual reality and smartphone
segments. An example of this is illustrated by Tobii’s recently
announced design win with a large smartphone manufacturer and by
Google’s acquisition of the eye tracking company Eyefluence.

During the last twelve months it has become increasingly more apparent
that eye tracking will be a central component in future VR-headsets and
smartphones. Tobii now intends to substantially increase the pace of
investment within these segments to be able to take a leading market
position. As already established within Tobii Dynavox, Tobii Pro and in
the gaming computer segment within Tobii Tech, Tobii also intends to
become the leading supplier of eye tracking technology in VR and
smartphones.

In order to build an attractive long-term business model, Tobii’s
strategy is to, in addition to eye tracking algorithms, also develop and
supply hardware components such as ASICs and custom designed image
sensors, as well as application software, all supported by Tobii’s
world-leading portfolio of patents related to eye tracking.

VR : Tobii and other market players such as Facebook-owned Oculus,
believe that eye tracking will become a standard component in future
generations of VR headsets, due to the many benefits that the technology
enables in the user experience, as well as the performance and design of
VR products. Within the framework of the Company’s existing financing,
Tobii has invested in developing basic technology for eye tracking for
VR, and has initiated dialogues with several headset manufacturers.
Since the VR market has developed at a very rapid pace, there is a need
to further strengthen Tobii’s organization in order to increase the pace
of technology development and to have the capacity to collaborate
simultaneously with a large number of customers and technology partners.

During a three-year period (2017-2019), and assuming the proposed rights
issue, Tobii intends to invest approximately SEK 150 million (net cash
flow) in VR.

Smartphones : Tobii recently announced its first design win with a large
smartphone manufacturer. The market for eye tracking in smartphones is
still at an early stage, but Tobii estimates that there is a longer term
opportunity for eye tracking to be integrated into smartphones on a
large scale. Tobii intends to further strengthen the organization to
develop eye tracking technology which is custom designed for
smartphones, and together with customers develop applications within
this area.

During a three-year period (2017-2019) and assuming the proposed rights
issue, Tobii intends to invest approximately SEK 150 million (net cash
flow) in the smartphone area.

Acquisitions and additional opportunities: Tobii has, in addition to the
above-mentioned initiatives, identified several potentially interesting
acquisition targets within the three business units Tobii Dynavox, Tobii
Pro and Tobii Tech. A strengthened cash position will give the Company
increased flexibility and capacity to rapidly execute on opportunities
to acquire companies, technology or intellectual property rights.

Tobii Tech also intends to make initial investments in technology and
market development within the automotive industry, which, in a few
years’ time, could develop into another large opportunity for Tobii.

Investment plan

Today, Tobii has an investment plan that was approved by the Board of
Directors in September this year that extends to 2019. This plan
includes extensive initiatives within gaming computers but does not
include the larger initiatives within VR and smartphones presented
above. This investment plan is fully financed partly from the positive
cash flows generated by Tobii Dynavox and Tobii Pro and partly through
existing funds within the Company, which is estimated to be sufficient
for the business unit’s investments up until it delivers a positive
operating profit.

The expected gross proceeds from the rights issue of approximately SEK
450 million, before transaction costs, will be utilized to accelerate
the Company’s investment plan to quickly and forcefully execute the
above-mentioned initiatives. Tobii estimates that the additional
investments will generate significant future values for shareholders.

The rights issue

On November 5, 2016 the Board of Directors of Tobii resolved, subject to
approval at the extraordinary general meeting on November 30, 2016, to
conduct a rights issue of new shares. Those who are registered as
shareholders by Euroclear Sweden AB on the record date December 2, 2016
have preferential right to subscribe for new shares in proportion to
their existing shareholdings. Application to subscribe for shares
without the use of subscription rights will also be possible.

The complete terms of the rights issue, including the increase in share
capital, the number of shares issued and subscription price are expected
to be announced at the latest on the November 24, 2016. The subscription
period is expected to run from December 6, 2016 up to and including
December 20, 2016, or a later date as decided by the Board of Directors.

The Board of Directors today announces the notice of an extraordinary
general meeting to be held on November 30, 2016.

Shareholders corresponding to approximately 40 per cent of the voting
rights, have expressed their support for the rights issue.

Prospectus

Complete information regarding the rights issue will be included in a
prospectus that is expected to be published December 2, 2016.

Timetable

The below timetable is preliminary and may be adjusted.

November 24, 2016

Estimated date for publication of rights issue terms, including
subscription price, number of new shares being issued and the
subscription ratio

November 30, 2016

Extraordinary general meeting to approve the rights issue resolved
by the Board of Directors

November 30, 2016

Last day of trading in Tobii with right to participate in the rights
issue

December 2, 2016

Record date for the rights issue, i.e. holders of shares who are
registered in the share register on this date will receive
subscription rights for participation in the rights issue

December 2, 2016

Estimated date for publication of the prospectus

December 6 – December 16, 2016

Trading with subscription rights

December 6 – December 20, 2016

Subscription period

December 23, 2016

Estimated date for announcement of outcome of the rights issue

Advisors in connection with the rights issue

Carnegie Investment Bank AB is financial advisor to Tobii and Baker
McKenzie is legal advisor in connection with the rights issue.

This information is information that Tobii AB (publ) is obliged to make
public pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person set
out below on November 7, 2016, at 07:02 a.m. CET.

About Tobii

Tobii is the global leader in eye tracking. Our vision is a world where
all technology works in harmony with natural human behavior. Tobii
operates through three business units: Tobii Dynavox makes specially
designed computers that are controlled by eye movement or touch screens
for use by people with special needs due to spinal cord injuries, CP,
ALS or other medical conditions. Tobii Pro develops and sells
eye-tracking equipment and services used today by more than 3,000
companies and 2,000 research institutions, including all of the world’s
50 highest ranked universities. Tobii Tech further develops Tobii’s
technology for new volume markets, such as computer games, personal
computers, virtual reality, smartphones and vehicles. Tobii is
headquartered in Sweden and is listed on Nasdaq Stockholm (TOBII). The
group has over 700 employees. For more information: www.tobii.com
.

Important information

This announcement is not and does not form a part of any offer for sale
of securities. Copies of this announcement are not being made and may
not be distributed or sent into the United States, Australia, Canada,
New Zealand, Hong Kong, Japan, South Africa or any other jurisdiction in
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not been and will not be registered under the U.S. Securities Act of
1933, as amended (the “ Securities Act ”), and accordingly may not be
offered or sold in the United States absent registration or an exemption
from the registration requirements of the Securities Act and in
accordance with applicable U.S. state securities laws. The Company does
not intend to register any offering in the United States or to conduct a
public offering of securities in the United States.

Any Offering of securities referred to in this announcement will only be
made by means of a prospectus. This announcement is not a prospectus for
the purposes of Directive 2003/71/EC (together with any applicable
implementing measures in any Member State, the “ Prospectus Directive
”). Investors should not invest in any securities referred to in this
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